This Vegas developer wants to build a destination for Fortune 500 execs that’s all business, no gambling

In early 2020, Doumani had just received the approvals needed to bring a new product to Sin City hospitality: gigantic, super-luxurious suites that he planned to sell to corporations. “Companies of all kinds want a big, permanent presence in Vegas, and this is a condo-style solution for them,” he told Fortune. “The suites could serve as corporate headquarters, or as a venue where the NFL holds meetings for team owners, or as display space for clothing companies that spend many millions every year on displays during Las Vegas Fashion Week that they tear down after four or five days.” Expected price on the penthouse that would occupy the entire top floor and cover the square footage of a pro football field to the 50-yard line: $100 million, or $12 million for the 6,500-square-foot, four-to-a-floor versions below. We’re talking Manhattan prices.

The Majestic’s Sky Suites were to occupy the top 10 floors of a 45-story, five-star hotel that would shine as an original in itself, the town’s first superluxury mega-resort that didn’t feature a single slot machine or roulette wheel, and banned smoking. The tower would rise on prime turf, a six-acre site Doumani owns directly across from the Las Vegas Convention Center, and a 150-yard jaunt from the Strip. “A lot of CEOs, hedge fund honchos, and professional athletes don’t gamble at all,” says Doumani. “They come to Las Vegas on business or for entertainment, and they don’t want to have to bet $500,000 a week to get the best suites. They also don’t want to walk through a noisy, smoke-filled casino to get to their rooms, or wait 20 minutes for an Uber. And we’ll have practically instant valet parking for all the Bentleys and Aston Martins.”

A leap in construction costs delays Doumani’s daring vision

Before COVID struck, the project’s numbers looked excellent. Doumani priced out the tower’s total construction costs at just over $600 million, including interest. He expected to raise around $450 million from preselling the Sky Suites, and finance the balance via a modest $150 million in borrowings. But after the outbreak delayed construction for 18 months, a second cyclone hit: a historic surge in construction costs. Doumani now puts his all-in expense at well over $900 million, representing a nearly 50% increase over three-and-a-half years, or 12% annually. “It’s the prices of concrete, steel, and labor, if you can find enough workers at all,” he says. “We’re also seeing long delays in getting materials, and interest costs have doubled since we assembled the original plan.”

Sure, the return of Las Vegas bookings to record-setting numbers exceeding pre-COVID levels makes his future hotel and Sky Suites more valuable. But the costs of new construction have risen much faster than the prices those properties could fetch. “For Majestic, we’ve seen a $300 million swing in profitability,” says Doumani. The extra $300 million he’d need to provide for erecting the tower makes the financing unfeasible right now. “Despite the good Las Vegas market, the jump in inflation meant that the figures no longer made sense,” he says. “I had no choice but to put the hotel and corporate condo project on hold.”

Doumani believes falling costs will restore the super-project’s profitability

Doumani is still forging ahead, but he now plans to advance in stages. Judging from what he’s seen in his 30 years as a successful developer, he expects materials and labor costs to fall around 10% over the next two years from their current heights as bottlenecks ease, curbing today’s inflated prices for everything from steel girders to custom glass sheathing. A slowing economy should swell the ranks of workers available for construction, and Doumani predicts that interest rates will peak by the end of this year, and slowly recede in 2024. Those trends, plus strong weekend occupancy rates of around 90%, and the dearth of fresh luxury hotel rooms in the pipeline, should rebalance the numbers, pushing the value of the finished project well above its total costs.

A powerful real estate rule is working for Doumani. When the “replacement cost” of birthing hotels or casinos or any other property exceeds the market prices of the ones already standing, building ceases, and the supply of rooms, say, or space devoted to gambling remains fixed. But as customers and dollars keep coming, the value of the existing stalwarts rises sharply. That dynamic makes mounting new properties a good deal once again. In office buildings, the big glut of space means that won’t happen for many years or ever, because of the work-from-home revolution. But hospitality is going the other way, because people liberated from commuting to offices are far freer to travel for pleasure. Las Vegas is already profiting big-time from that trend. That the city now hosts the Raiders and Golden Knights, and looks to add a Major League Baseball team, only enhances its appeal. Bottom line: Doumani is counting on the confluence of more and wealthier tourist traffic, and a likely retreat in unsustainably high construction costs, to restore the Majestic’s projected P&L to strong profitability.

Doumani predicts that the economics will shift to his favor within around two years. He plans to start selling Sky Suites in mid-2024 and begin work on the big tower the following year, for completion in 2028. But he’s moving forward on a starter project where the numbers make sense right now. He’ll break ground on the sprawling plaza at the base of the future Majestic early next year, and its five restaurants should begin welcoming guests by mid-2025. Doumani prizes this free-spirited confection as establishing the spirit that will characterize the entire complex.

The renderings from architect Paul Steelman, who designed Four Seasons and Sands in Macau, and Resort World and Circa in Vegas, feature few right angles and a riot of undulating, swirling shapes that suggest constant motion. Capping the curving contours is a 15-foot revolving, wraparound digital screen that will show everything from NBA games to ads for the eateries. The whimsical look might be called “theme park for grownups.” “The plaza’s a throwback to the crazy days of the Rat Pack in the 1960s,” says Doumani.

Indeed, the design evokes the jazzy rhythms of that swinging time. Viewing the mockups, you can almost picture Frank, Dean, and Sammy, fedoras tilted and skinny ties in place, jackets thrown over their shoulders, tippling at the Whiskey Bar. You could imagine Lorenzo, who sports shades and tight-fitting black jackets over an open-collared white shirt, cracking wise right alongside the hipsters who created the party-till-we drop style he’s out to recapture. In his view, what could be better marketing than reviving that “anything goes” swagger?

Doumani grew in the “Rat Pack” Vegas, and seeks to restore its spirit in glass and steel

Doumani’s family ranks as Las Vegas royalty. His grandfather emigrated from Lebanon at age 14, and after rising to success in endeavors from gold mines to oil wells to apartments in California, in the late 1950s acquired sites for side-by-side motels—at a time when the city’s population was a mere 50,000 or 60,000. Lorenzo’s father, Edward Doumani, an attorney, joined his father in Vegas to assist on the jobs, and took a small ownership stake in the Frontier, where he got to know a young slots manager named Steve Wynn.

His grandfather’s best friend Danny Thomas, also of Lebanese origin, recommended the architect who had designed the comedian’s Beverly Hills mansion, as an ideal choice for the twin motels project. That’s how Paul R. Williams came to concoct the facades of flutes, curves, and arches for two quirky landmarks that were long an indelible part of the Vegas landscape, the La Concha and El Morocco. Williams, an African-American who doubled as a leader in the civil rights movement, advanced to become one of the most influential practitioners of the 20^th century, conceiving the futuristic terminal at LAX, homes for Frank Sinatra and Lucille Ball, and the original, star-shaped building for Thomas’s St. Jude Children’s Hospital in Memphis.

The La Concha and El Morocco were early examples of Williams’s genius at risking the outrageous to achieve the sublime. The El Morocco looked like Moorish kitsch, exoticizing what was then the land of 99-cent buffets, while La Concha’s facade resembled a spaceship shaped as a gracefully arched “W.” For Lorenzo, Williams’s freewheeling, improvisational designs were the hallmark of an era and inspired his vision for the Majestic and its plaza. 

Lorenzo’s grandfather died during construction of the El Morocco in 1964, and his father went on to partner with Wynn in purchasing the Golden Nugget and building its namesake in Atlantic City. Lorenzo was practically raised at the La Concha and El Morocco, and got a front-row view of its starry clientele. “The two motels were rare properties that were non-gaming, which gave me the idea for the Majestic,” he notes. “The celebrities who stayed there didn’t want a casino; they didn’t want all the noise, smoke, and attention.” Doumani recalls that when he labored as a pre-teen bellman in the late 1960s, Muhammed Ali—who made La Concha his training camp—would kneel to show him how to throw a kid’s version of the champ’s haymaker, a left jab, and perform magic tricks for children, and guest Elvis Presley would read to him from the Scriptures. “Elvis loved to buy pink Cadillacs and other expensive cars for his friends,” recalls Doumani. “He bought a yellow Stutz Bearcat for his Las Vegas doctor that the doc used to drive us around in.”

Especially memorable was a golfing expedition with charter Rat Packer Sammy Davis Jr. “I’m parking cars and cleaning golf shoes at the Tropicana Country Club, but they wouldn’t let me caddy,” says Doumani. “Suddenly, I’m asked to caddy for Sammy, and I soon learned why no one wanted the job. He owned a red, white, and blue custom Rolls-Royce golf car, parked at the club just for him. He was a hell of a nice guy and a terrible golfer. He had one glass eye, and since his vision was bad, he’d drive the ball 40 yards into the trees. I’d move it 50 feet forward onto the fairway, or we’d never make it through. It took him five hours to play nine holes!”

In the early 2000s, the Doumani family took down the La Concha and El Morocco, and Lorenzo secured all entitlements for a major hotel complex spanning the two properties. When plans for a Waldorf Astoria in partnership with Hilton fell through, Doumani in 2007 sold the sites to Canadian developer Triple Five for $180 million. The onetime location of the architectural marvels that excite Doumani to this day now stands empty. Doumani is still the landlord for the nearby coffee shop to the stars, the Peppermill, famed for its neon-lit interior, shag carpeting, faux-leather booths, and Brobdingnagian eight-egg omelets.

In 2013, Doumani purchased the Park Hill Estate from singer Katy Perry and then-husband Russell Brand. Doumani restored the former 1920s mansion in West Hollywood, covering 14,000 square feet, to its former glory, and now rents the property for events, weddings, and corporate getaways. In late 2014 he acquired the six-acre Majestic acreage, the former site of the Debbie Reynolds Hollywood Hotel, named for its owner, star of Singin’ in the Rain and mom to Carrie Fisher, and when Doumani took ownership, home to one of its many short-lived successors, the Clarion. Doumani soon imploded the dilapidated hotel using dynamite in a Sin City extravaganza that drew large crowds and TV audiences. “When the dust cleared, the elevator shaft was still standing,” says Doumani. “The demolition people told me it’s the only time a building didn’t come down completely on one of their jobs. The next day, they had to use cables to put a ‘collar’ around the shaft and pull it down. That was part two of the extravaganza.”

In one sense, Doumani’s timing was quicksilver. In 2016, the city announced plans for the convention center that now sits facing his 2,000 feet of frontage on Convention Center Drive. Doumani greatly enhanced the land’s value by securing regulatory approvals for the 720-room hotel and 35 Sky Suites, as well as the plaza to feature the five restaurants. But first COVID and now the rampant jump in building costs have repeatedly forced him to delay the starting date for the 620-foot-tall hotel tower, now set at 2025. The Majestic Plaza soon to begin construction gives Doumani a canvas to bring the mischievous designs—Frank’s finger-snapping “Come Fly With Me” could be the soundtrack for the rippling images floating by in the video renderings—that epitomized the old Vegas to new generations. It will help establish the blithe Majestic brand that will eventually draw folks from the Strip, and across the street at the convention center, to the superluxury hotel.

Of course, whether the big tower gets built will depend on whether companies will want those huge Sky Suites to establish lasting bases in Vegas. Doumani’s no gambling man, and he hedged by postponing that giant phase. He’s witnessed Vegas go from a desert hamlet to a casino capital to a global playground for entertainment. Its next chapter, he believes, is as a key outpost for big companies, and for the rich and famous looking not for gaming, but for fun. And reprising the look and feel from the coolest of times ruled by the coolest of cats could be a marquee draw.